In Eric Goldman’s recent Forbes.com 3-partseries onsoftware patents he discusses what he perceives as the problems and challenges facing patent filer and the U.S. Patent and Trademark Office. This article responds to all three of his articles.

Unfortunately, Goldman is not only wrong on most of his statements which he presents as “facts," he is viewing this controversy from his vantage point only as an IP lawyer and teacher. Had he worked in the software industry, he might have had a much different viewpoint. I say this after having spent over 35 years directly in the software industry and another 20 years as a software consultant and investor in software start-ups.

In the first part of Goldman's series, he states that the software industry “differs than other major innovative industries” and that “software patents have also created big - and expensive - problems for companies throughout all sectors of our economy.” He then explain what he believes to be unique about software and that there are three main differences between the software industry and other innovative industries. His three differences are 1) Software has short innovation cycles; 2) Software will be produced without any patent incentive; and 3) Other problems.

He’s wrong on these 3 differences. Here’s why.

Difference 1: He's wrong in his assertion that software has short innovation cycles. His basic premise is that “software has short innovation cycles.” Most successful companies in the software product industry still actively market software products that were introduced 20 or more years ago. Examples are products from Oracle, CA, SAP, IBM and Microsoft. These companies continually upgrade their products to keep them viable. Because Goldman believes that software has short innovation cycles he also states that “software has significant first mover advantages” and “software lifecycles end before patents issue.” Both of those statements are completely false.

Goldman’s example of a software innovation with a two-year commercial lifecycle is not representative of real-life situations. Long lifecycles are more representative of the products of thousands of companies in the software industry. These companies are part of the Software Products and Services Industry with annual revenues over $300 billion. Many of these software product companies can be thought of as high-technology manufacturing entities. For these companies, there are generally six phases in the life cycle of their products and their marketability is more than the 18 years of patent protection.

Difference 2: His assertion that software will be produced without patent incentives misses the market. Many software product companies are funded through private investments, venture capital and through public offerings where a return on investment is expected. There are active research and development activities by many of these companies. In 2011, Microsoft's R&D budget reached a record high of $9.6 billion. So there is absolutely no evidence that software companies do not need the same patent protection given to inventors (and their companies) of other industries so that investors get a fair return on their investments.

Goldman also makes the false assumption that “Copyrights and Trade Secrets provide adequate production incentives.” But here are the facts. Patents protect the invention while a copyright only protects the illegal copying of computer programs. A copyrighted program is not able to protect any invention that might be embedded in that computer program. It’s just not a viable substitute for patent protection. That’s why there are many thousands of software patents filed each year. As for Trade Secret law, which varies state by state, it has limited usage by software companies. I challenge Goldman to name those software companies that today use trade secrets as a primary method to protect their software invention. I’m certain that if there are any, it’s a very short list.

Goldman concludes this section with two additional arguments. First, he believes that “software vendors can restrict competition without patents.” His argument is that “software can have substantial lock-in effects that can thwart competition without patents.” He then uses the example of a lock-in by describing something that happened over 20 years ago with “macros in Lotus 1-2-3.” Unequivocally, the Software Products Industry is fiercely competitive

Goldman’s final argument is that “software gets produced without any IP incentives at all.” Goldman states that “The free and open source software community provides another example of software’s quo without patent’s quid.” While the open source community may not want patents that does not mean that the Computer Services and Products Industry does not need, or want, patent protection as an incentive to invest in its software developments.

Difference 3: Goldman is wrong in his view that software is patented at too high a level of abstraction. If Goldman looks at patents issued to most software products companies they are very specific and not at all abstract. Another Goldman argument is that “software is too hard to describe precisely.” Not true. Software is easy to describe through diagrams, flow charts and descriptive text. Article 29 of the U.S. Patent Office's application guidelines covering "Disclosure Obligations" states "an applicant for an invention shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for carrying out the invention." Clearly, if the best mode is software (a computer program), then that disclosure would be described through diagrams, flow charts, and descriptive text.

In part 2 of his series, Goldman focuses on the question of whether software can be defined. The answer is unequivocally “yes.” When computer programs came into existence in the late 1940’s and in the 1950’s, the term software became a synonym for a computer program. Wikipedia has an excellent definition of software. Goldman then poses a hypothetical second challenge by writing about a recently proposed congressional bill, the SHIELD Act, and stating that its definition of a patent does not clearly state what a “process” is. He ends this article stating “crafting special rules for software patents” might cause us (the US) to violate our international treaty obligations.”

Goldman is going off on a tangent and is not really discussing any real challenges. A “process” is very well defined by the Patent Office. Finally, his argument that software patents “might cause us (the U.S.) to violate our international treaty obligations” is an argument pulled out of thin air that has zero validity.

The third part of Goldman's series summarizes the suggestions of many of the IP lawyers that attended a November 2012 conference at Santa Clara University entitled ”Solutions to the Software Patent Problem.”

In my opinion, none of the suggestions offered at the conference would change the real problem, which is that the Patent Office examiners are too quick to issue software patents where the so-called invention is obvious to one skilled in the art. For a more detailed review of my positions on software patents see my article “No” to Software Patents Per Se: Software is Only a Means to an End.